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US Dollar May Pull Back After Prices Set New Yearly High

By , Currency Strategist
17 May 2012 05:49 GMT

THE TAKEAWAY: The US Dollar has scope for a corrective pullback after prices hit a new 2012 high yesterday, which may produce a short-term recovery in the S&P 500.

S&P 500 – Prices took out support at 1331.50, the 123.6% Fibonacci expansion, to challenge the 138.2% level at 1322.00. A break below this boundary exposes the 150% Fib at 1313.90. The 1331.50 level has been recast as near-term resistance, with a push back above that exposing 1347.60.

US_Dollar_May_Pull_Back_After_Prices_Set_New_Yearly_High_body_Picture_5.png, US Dollar May Pull Back After Prices Set New Yearly High

Daily Chart - Created Using FXCM Marketscope 2.0

CRUDE OIL Prices put in a Spinning Top candlestick above support at 92.51, the December 16 low, hinting a bounce may be ahead. Initial resistance lines up at 95.41, the February 2 session low. Alternatively, renewed selling through support exposes 90.49.

US_Dollar_May_Pull_Back_After_Prices_Set_New_Yearly_High_body_Picture_6.png, US Dollar May Pull Back After Prices Set New Yearly High

Daily Chart - Created Using FXCM Marketscope 2.0

GOLD Prices put in a Spinning Top candlestick above support in the 1532.45-1522.50 area, marked by the September 26 and December 29 spike lows, hinting a bounce may be ahead. Initial resistance lines up at 1561.03, the 23.6% Fibonacci retracement. Alternatively, a push through support exposes the 1500/oz figure.

US_Dollar_May_Pull_Back_After_Prices_Set_New_Yearly_High_body_Picture_7.png, US Dollar May Pull Back After Prices Set New Yearly High

Daily Chart - Created Using FXCM Marketscope 2.0

US DOLLAR Prices are taking a step backward after taking out resistance at 10097, the March 15 swing high. Near-term resistance is at 10140, the 76.4% Fibonacci expansion. A break back below this barrier, now reinforced by the 61.8% expansion at 10079, followed by the April 5 high at 10047.

US_Dollar_May_Pull_Back_After_Prices_Set_New_Yearly_High_body_Picture_8.png, US Dollar May Pull Back After Prices Set New Yearly High

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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17 May 2012 05:49 GMT